Press Release: State aid: Commission approves UK Homeowners Mortgage Support Scheme to help households affected by financial downturn

The European Commission approved under EC Treaty state aid rules the UK Homeowners Mortgage Support Scheme, which is aimed at reducing the level of home repossessions that are likely to occur as a result of the current economic downturn. It will allow households that are unable to meet their mortgage repayments following a temporary drop of income, which could be linked to crisis-related unemployment, to defer all of their principal and up to 70% of their interest repayments for a period of up to 2 years. In return, the UK will provide the lender with a guarantee on part of the deferred interest. The Commission concluded that this UK support measure is compatible with Article 87.2.a of the EC Treaty.